Higher Education Today: Spotlight on College Debt

With graduation season upon us, the topic of college debt is predictably ubiquitous. Last week, as I browsed Knewton’s Higher Education Today portal, which aggregates news stories related to higher education and organizes them by state, I was afforded a comprehensive look at just how student debt is affecting individual states as well as the nation as a whole.

Here’s a quick look at what I found.

The Problem

Time Moneyland’s “Has graduation season become the most depressing time of year?” contains a series of shocking stats like the following: “The average student debt load tops $25,000 in the U.S., while the job market for recent graduates continues to struggle. More than 95 U.S. colleges report that their 2010 graduates — the most recent data available — owed on average more than $35,000, and 73 colleges reported that more than 90% of the 2010 class had student loan debt, according to an analysis by the nonprofit Institute for College Access & Success’ Project on Student Debt.” The problem is, of course, augmented for college dropouts who are in serious debt but hold no college degree.

To get a look at how college debt is affecting your state, subscribe to your state’s feed at the higher ed portal. State-specific articles like “Crushed by College Debt” contain nuggets of good-to-know information like the following: “130,000-plus Michigan residents are trying to repay school loans, and 10,711 are in default. Their average debt in 2010: $25,675.”

The political side of the issue has played a notable role in recent campaigns: President Obama has been touring the nation and stressing the need to hold down college costs and urge Congress to pass a law preventing interest rates on some federally backed loans from doubling (scheduled to happen July 1). GOP nominee Mitt Romney has expressed similar concerns, though he differs in what he believes the federal government’s role should be.

The article, “College debt a ticking time bomb” notes, however, that “neither party has proposed a long-term solution for the time bomb represented by the estimated $1 trillion balance owed on student loans.” The article describes student debt as “several time bombs ticking simultaneously”: the economic fallout of a default rate that has doubled in recent years; the projected drop in economic demand as young people begin putting off major purchases that come with marriage, family, and home ownership; and the erosion of the American promise of meritocracy.